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KLEIN SHEDS ADS, NOT APPEAL

Published on September 18, 1995.

CHICAGO-Like them or not, those controversial ads have helped make sure nearly everyone knows the Calvin Klein name.

In a national phone survey conducted Sept. 5-6 for Advertising Age by Leo J. Shapiro & Associates, 97% of 201 adults and teens ages 13 and up knew the Klein name, compared with 98% for Levi's, 88.6% for Guess? and 57.7% for Lauren. Only 56% were aware of the controversy, though campaign recall (64.2%) was comparable to that of Levi's at 69.7.

Not bad considering Calvin Klein Inc. spent just $4 million on advertising in 1994, according to Competitive Media Reporting. Spending on the latest campaign was estimated at $6 million. That compares to $104 million by Levi Strauss & Co., though Klein licensees like Unilever (fragrances) and Warnaco (underwear) kick in upwards of $30 million hyping the name.

But does brand awareness necessarily drive sales?

Nearly one-fourth of adults and teens alike said the ads made them feel less favorable about buying Calvin Klein products. Only 10% of adults said they felt more favorable; 26% of teens said they did. For the majority, the ads were said to have no impact on buying intentions.

"What we are seeing is a power campaign imprint energized by controversy, but doubtful selling appeal," said Shapiro CEO George Rosenbaum.

The survey, with a margin of error of plus or minus 7 percentage points, was done before the FBI announced it is investigating the campaign.

Before the FBI announcement, retailers from Macy's West to Bloomingdale's to Rich's/Lazarus/Goldsmith's, reported Calvin Klein products were flying out of stores-as they did before the campaign.

"All his products are selling and quite well," said a Macy's spokeswoman.

Underwear is particularly hot, said James Gundell, Bloomingdale's senior VP-general merchandise manager for ladies accessories. "Up is not the word. Sales are phenomenal. But it has nothing to do with the campaign. Warnaco took over the license and since this spring [Warnaco Chairman] Linda Wachner has worked her magic with new products."

Combined, underwear and fragrances account for an estimated $750 million of Klein's $1 billion in manufacturer sales.

Mr. Klein says he expects jeans sales will nearly double this year to $220 million from $115 million in 1994. And $350 million is projected for 1996 as the company builds its business overseas through a licensee partnership with Rio Sportswear and Charterhouse.

Earlier this month, he opened a 20,000-square-foot store on New York's Madison Avenue.